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Why invest in North Cyprus
North Cyprus Property Investments
Since 2004 investment in property in Northern Cyprus has surged ahead with real estate buyers aware that many types of property for sale in TRNC have internationally recognised title deeds. The Turkish Republic of Northern Cyprus is the Turkish Cypriot controlled area which makes up the northern third of the Mediterranean island of Cyprus and which is divided from the rest of Cyprus by the UN controlled buffer zone or ‘green line’.
The Turkish Republic of North Cyprus was formed as an area of safety for the Turkish Cypriot inhabitants of the island following the Greek mainland attempt to size control of the government of Cyprus back in 1974. Since 1974 the northern third of the island has suffered embargos and been annexed politically from the rest of the world; but since 2004 all that has slowly begun to change and the world is awakening once more to the stunning beauty and wealth of opportunity available in Northern Cyprus.
Cyprus was once a British colony and in recent history it was inhabited mainly by Greek and Turkish Cypriots but also by a number of British citizens as well. In 1960 Britain gave Cyprus its independence but retained two sovereign bases in the country. In 1963 violence began to erupt between the majority Greek Cypriots and the minority Turkish Cypriots. Over time this violence escalated and the UN peacekeepers were called in, they established a green line between certain enclaves housing Turkish Cypriots - who fled into the enclaves as they feared for their safety - and the Greek Cypriots.
The sorry state of affairs continued with violence and threat escalating on both sides until 1974 when a Greek sponsored coup in Cyprus attempted to join the island with the Greek mainland. Turkey, fearing for the safety of its people launched a swift and effective military operation which swept Greek Cypriots out of the northern third of Cyprus and secured this land for its Cypriot people. Because Turkey did not wait for UN backing for its military operation the Greek sponsored coup was quickly forgotten about and instead, Northern Cyprus was politically annexed and the people of the island suffered embargos up until 2004.
In 2004 as Cyprus was aligned for EU entry the UN finally realized that they had to attempt to reunite the island as never before had a divided nation entered the EU. The UN brokered peace talks between both sides of the island and these resulted in the development of the Annan Plan to which both sides were asked to agree upon. Among many other issues, the Plan would put an end to the land disputes that exist in Cyprus and about which I’m sure you’ve read.
The land disputes exist where Turkish Cypriot land in south Cyprus was nationalised by the government of the Republic of Cyprus following 1974 and given to displaced Greek Cypriots from the northern third of the island. And of course it also exists the other way where former Greek Cypriot land in Northern Cyprus was nationalised by the TRNC government and given to Turkish Cypriots displaced from the south.
The Turkish Republic of Northern Cyprus and the Republic of (South) Cyprus took the terms of the Annan Plan to their people for a vote of confidence. Unfortunately only the Turkish Cypriots voted in favour of the plan for peace. Further unfortunate events began to unfold as it became clear that the progress of Cyprus towards EU accession had gone too far to stop it and so only the Republic of Cyprus was able to join the EU in 2004 meaning that a divided nation did indeed join the European Union. Oddly though, all Cypriots - whether Greek or Turkish - now have the right to an EU passport and the whole of Cyprus has begun to benefit from the EU effect!
The land disputes continue but despite what you may have read not all land and property in Northern Cyprus is in dispute - far from it in fact! Only about 17% of the land in North Cyprus was formerly owned by Greek Cypriots are there’s an abundance of land and property for sale in North Cyprus with internationally recognised title deeds.
In terms of the attractions of Northern Cyprus - well they are manifold! For example the prices of land and property for sale in Northern Cyprus are up to 5 times cheaper than on the south. Since 2004 the UN and US have begun ploughing significant money into the north to reward its people for voting yes to the Annan Plan and also to boost the economy so that it can come in line with that on the south.
It is very important that the TRNC’s economy is brought up so that when the north and south enter into talks again, there will not be such a huge disparity in economies.
Such a huge disparity will be very damaging for the south if it is allowed to remain as investors are likely to leave the south in favour of the north and this could undermine the stability of the Republic of (south) Cyprus.
Investors entering the main market sectors in TRNC now - namely the real estate market and the tourist sector - are starting to benefit from what is predicted to be a prolonged period of sustained growth in the economy of the North as TRNC comes in line with south Cyprus.
The economy in Northern Cyprus is being further boosted by the hundreds of new international residents it is attracting annually who have only recently learned about this gloriously untouched and affordable Mediterranean haven where English is widely spoken, health, education and general living standards are first class, where the cost of living is incredibly low and where the people are so genuinely welcoming that a home from home abroad can be quickly established.
The sun shines in Cyprus for up to 320 days a year and the climate is inimitable in its perfection. The beaches of Northern Cyprus are sandy and in the summer they are home to rare sea turtles as the beaches have been left untouched. North Cyprus is also home to many castles, historical landmarks and cultural areas of interest as well as first class international bars, restaurants, hotels and casinos. These are just some of the many reasons why property investor interest in TRNC will not be slowed or stopped - in fact, such is the desire for homes for sale in Northern Cyprus currently that property developers cannot keep up with the current demand!
What the Future Holds for North Cyprus
Other Investment Incentives
Foreign investment is actively encouraged, and those willing to invest in N Cyprus can be sure of a positive Government attitude including:
o Leasing of land for extended periods at favourable rates.
o Import duty exemptions for goods concerning the project.
o Government contribution to charter risk.
o Contribution to brochure/advertisement expenditure up to 75%.
o Exemption from tax for ten years in case of tourism investment
o Annual interest and principal instalments of foreign loans enjoy a transfer guarantee.
o 20% annual foreign exchange earnings deductions from taxable income for tourism companies
o Free transfer of proceeds in case of liquidity of investments.
o Repatriation of profits without restriction or limitations.
o Employment of foreign personnel who are not available locally.
o Transfer of net income earned by foreign personnel is free.
o Exemption of constriction license fee.
REGISTERING A COMPANY IN NORTHERN CYPRUS
With reference to the registration of a company, the legal form widely used for business undertakings in the TRNC, both by foreign investors and by local businessmen, is the private limited company. The provisions concerning the limited company are set out in the Company's Law, Cap 113, which is almost identical with the UK's Company Act of 1948.
Permission is obtained from the Council of Ministers for foreign ownership of TRNC registered companies, usually within two or three months of application. The foreign ownership can be up to 49%, with the main share holder(s) being of TRNC citizenship owning at least 51%. A business permit is also required, which may be obtained from the Immigration Office. In case of foreign investment, the TRNC citizen (s) will normally hold their shares in trust for the actual foreign investor and contracts reflect the substance of this agreement rather than the form.
The TRNC is encouraging a policy of attracting foreigners to come and live and work in N Cyprus - in particular, to invest in businesses, especially within the tourism sector. This, of course, opens up a multitude of trades and businesses, from travel agencies, transport companies (whether land, sea or air), hotels, bars, restaurants, holiday villages, tourist related services such as water sports, recreational land sports such as tennis, golf, horse riding etc.